This period consists of the Paleocene, Eocene, and Oligoceneepochs. The end of the Paleocene (55.5/54.8 Mya) was marked by the Paleocene–Eocene Thermal Maximum, one of the most significant periods of global change during the Cenozoic, which upset oceanic and atmospheric circulation and led to the extinction of numerous deep-sea benthic foraminifera and on land, a major turnover in mammals. The terms 'Paleogene System' (formal) and 'lower Tertiary System' (informal) are applied to the rocks deposited during the 'Paleogene Period'. The somewhat confusing terminology seems to be due to attempts to deal with the comparatively fine subdivisions of time possible in the relatively recent geologic past, for which more details are preserved. By dividing the Tertiary Period into two periods instead of directly into five epochs, the periods are more closely comparable to the duration of 'periods' of the preceding Mesozoic and Paleozoic Eras.

The global climate during the Paleogene departed from the hot and humid conditions of the late Mesozoic era and began a cooling and drying trend which, despite having been periodically disrupted by warm periods such as the Paleocene–Eocene Thermal Maximum[9], persisted until the temperature begun to rise again due to anthropogenic influences (Anthropocene) at around 1945. The trend was partly caused by the formation of the Antarctic Circumpolar Current, which significantly lowered oceanic water temperatures. A 2018 published study estimated that during the early Palaeogene about 56-48 million years ago, annual air temperatures, over land and at mid-latitude, averaged about 23–29 °C (± 4.7 °C), which is 5–10 °C higher than most previous estimates.[10][11] Or for comparison, it was 10 to 15 °C higher than current annual mean temperatures in these areas; the authors suggest that the current atmospheric carbon dioxide trajectory, if it continues, could establish these temperatures again.[12]

During the Paleogene, the continents continued to drift closer to their current positions. India was in the process of colliding with Asia, forming the Himalayas. The Atlantic Ocean continued to widen by a few centimeters each year. Africa was moving north to meet with Europe and form the Mediterranean Sea, while South America was moving closer to North America (they would later connect via the Isthmus of Panama). Inland seas retreated from North America early in the period. Australia had also separated from Antarctica and was drifting toward Southeast Asia.

Mammals began a rapid diversification during this period. After the Cretaceous–Paleogene extinction event, which saw the demise of the non-avian dinosaurs, mammals transformed from a few small and generalized forms that began to evolve into most of the modern varieties we see today. Some of these mammals would evolve into large forms that would dominate the land, while others would become capable of living in marine, specialized terrestrial, and airborne environments. Those that took to the oceans became modern cetaceans, while those that took to the trees became primates, the group to which humans belong. Birds, which were already well established by the end of the Cretaceous, also experienced an adaptive radiation as they took over the skies left empty by the now extinct Pterosaurs.

Pronounced cooling in the Oligiocene led to a massive floral shift and many extant modern plants arose during this time. Grasses and herbs such as Artemisia began to appear at the expense of tropical plants, which began to decline. Conifer forests developed in mountainous area. This cooling trend continued, with major fluctuation, until the end of the Pleistocene.[13] This evidence for this floral shift is found in the palynological record.[14]

The Paleogene is notable in the context of offshore oil drilling, and especially in Gulf of Mexico oil exploration, where it is commonly referred to as the "Lower Tertiary". These rock formations represent the current cutting edge of deep-water oil discovery.

Lower Tertiary rock formations encountered in the Gulf of Mexico oil industry usually tend to be comparatively high temperature and high pressure reservoirs, often with high sand content (70%+) or under very thick evaporite sediment layers.[15]